According to Comptroller General Gene Dodaro, improper payments made by the federal government continue to cost taxpayers billions of dollars a year – more than a trillion, if you add them up over the years. In testimony before the Senate Budget Committee, Dodaro said on Wednesday, “These are payments that should not have been made or were made in the wrong amounts.” In his opening statement, Dodaro said that the problem has grown from $125 billion in 2014 to $137 billion in 2015. For 2016, it is estimated that the payments rose to $144 billion. “This includes estimates for 112 programs at 22 federal agencies, so it is a pervasive problem,” he added.
Since 2003, Congress has required many executive departments and agencies to estimate annually the amount of improper payments made. Dodaro said that the cumulative total since that time will be “in excess of $1.2 trillion.”
According to Dodaro, Medicare, Medicaid, and the Earned Income Tax Credit account for 75 percent of the improper payments. “But there are a number of programs across government where this problem is an issue,” he said. However, the outflow may be worse than the figures offered by Dodaro. The 18 “risk-susceptible” programs , which include Temporary Assistance for Needy Families (TANF), do not provide estimates of improper estimates. SNAP (food stamps) stopped reporting in 2015. In addition, the $144 billion estimated for 2016 does not include estimates from the Defense Department. He called for “more aggressive congressional oversight.”
Dodaro said the Department of Health and Human Services believes it lacks the authority to ask the states for information in order to estimate improper payments for programs such as TANF. “I think Congress should act statutorily to require the TANF program to develop an improper payment estimate,” Dodaro said. He noted that the HHS inspector general has recommended that Congress clarify that issue.
SNAP, the Supplemental Nutritional Assistance Program, reported improper payment estimates through 2015, “and then they identified a problem with the quality of the information” in 42 of the 53 states and territories. Dodaro said he expects SNAP to resume making estimates once problems at the agency are addressed. Estimates of improper payments by the Department of Defense are not accurate, said Dodaro, because DoD does not “document the full universe of transactions.”
Sen. John Boozman (R-Ark.) noted that the federal deficit for Fiscal 2016 was $587 billion. “Would it be accurate to say that this means that close to a quarter of our deficit in fiscal year '16 could be attributed to improper payments?” Boozman asked Dodaro. “The numbers work out that way,” Dodaro said. “You know, I'm not sure you could save all $144 billion at once. In fact, I don't think you could, based on the practices of the agencies. So I don't think we can solve our deficit by reducing improper payments alone.” However, Dodaro said reducing improper payments “would make it easier to deal with our long term problems," even if it won't solve them.
“But on the other side we've got a tax gap of over $400 billion on annual basis of revenue that should be coming in that's not. So we've got money going out the door that shouldn't and revenue coming in. Both of those things would help,” Dodaro said.